Private sector invited to share in $14 billion WA assets

More than $14 billion of government-owned assets in Western Australia’s Pilbara region are being touted as private sector opportunities in a bid to foster much-needed infrastructure development in the mining heartland.

Regional Development Australia has produced a prospectus listing “major investment priorities" in the Pilbara, ranging from land and housing to power supply and waste management. The prospectus is targeted at super funds, banks and organisations interested in public-private partnerships.

“Rather than the Pilbara going cap in hand, trying to seek funding from the state and federal governments, we thought we’d package those assets up and make them attractive enough for those sort of entities," RDA Pilbara chairwoman Collene Longmore said.

The initiative follows calls from Infrastructure Australia for state and federal governments to sell off more than $200 billion in “lazy assets" to help plug the country’s infrastructure gap. Ms Longmore said her organisation had consulted Infrastructure Australia chief
Michael Deegan
about the prospectus and had his support.

The largest of the opportunities outlined in the document is in land and housing, with an estimated $9 billion program required to meet the Pilbara Cities vision of delivering 35,000 new dwellings in the region by 2035.

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Ross Holt, chief executive of state agency Landcorp, said that, as more private investment flowed into the region, the government would start to pull back its involvement in land and housing development.

When the Pilbara Cities project, which is funded by the Royalties for Regions scheme, began in 2009 there were three builders operating in the region. Now there are more than 30.

Speaking at a recent event in Perth, Mr Holt said it was crucial that attention turned to attracting financial institutions to invest in the region and convincing them growth was more than just a fad.

Dorado Property executive director Tim Moore said he had been offered the chance to invest in a number of infrastructure projects in the region, but many were too risky.

“I think the increasing pressure on the public purse is going to see more and more private public partnerships," he said.

“In our view, it’s best that elephants dance with elephants, and trying to deal with government introduces administrative overheads that we’re not up for."

Dorado manages the investments of three private high net worth families, and has been involved in 15 property developments in the Pilbara totalling around $250 million in investment.

Mr Moore said recent volatility in the resources industry had not deterred Dorado from investing in the region, but it meant projects had to match the certainty of returns in other regions or capital would go elsewhere.

“If the Pilbara was a person, Royalties for Regions is the morning cup of coffee. It makes you feel better and a little bit more perky, but you still get up and get on with your day. This is really about whether Japan needs our LNG over the long term, whether China’s economy continues to industrialise and needs our iron ore."